Tech Rumors: Facebook Goes for Music

One of the greatest promises of the digital revolution is that it would remove many of the barriers to instant listening gratification. For example: having to purchase a physical product from a retail establishment with limited shelf space, or waiting for a song you liked to come on the radio. To a large degree, that’s been accomplished — at no other point in history has it been easier to access vast catalogs of music online. The tension, however, has always been in finding business models that make sense for both creators and consumers. Today’s marketplace has a number of innovative, fully licensed music services, which is definitely encouraging.

Of course, we at FMC are primarily concerned with artist compensation. It may be too early to know for sure whether emerging digital services will amount to a significant payday for artists, but we’re committed to mapping the current revenue environment on all platforms. Check out our Artist Revenue Streams project for more info, and stay tuned for the launch of our online musicians’ survey on Sept 6.

Social music initiatives like the one that Facebook is rumored to be launching have had mixed success. Not all that long ago, MySpace revamped their site as a media content destination. The recent sale of the company for far less than its peak worth is an indication of how successful that attempt was. Apple’s Ping didn’t really take off with consumers, and Google seems to be in a perpetual “beta” phase. Facebook, on the other hand, looks to have some real potential, simply based on the sheer volume of users. One would have thought that they’d have been ready to launch the music initiative to coincide with Spotify’s arrival in the U.S., but better late than never, right? Also, rumors indicate that the Facebook revamp will also include similar services like Rdio, which might be why it’s taken a little while to get their ducks in a row.

Now, it’s important to keep in mind that some music services are already integrated with Facebook to a degree. For example, Spotify lets you send updates to your Facebook page about what you’re listening to. What we’re likely to see in a revamped Facebook music platform is the ability to listen within the application. Remember, Facebook wins by keeping you within their sandbox so they can sell you ads. The mystery at the moment is how compensation works within this new system. Keep in mind that the more Spotify or Rdio tracks are played, the more money they have to pay to rightsholders. Facebook might help bump up usage (and visibility), but the music services still need to convert casual listeners into paying subscribers in order to make the math work.

Chances are we’ll know more on September 22, when Facebook does the big reveal at the F8 developers conference in San Francisco. Stay tuned…